Question

IN FINANCIAL ANALYSIS ADJUSTING FOR INFLATION IS
A- significant factor
B- insignificant factor
c- On case to case basis
D- Depends on state of economy

Answer 1

Answer:

When restating historical costs to reflect inflation adjusted numbers, price level changes are measured by a cost ratio constructed of price indices. An index is used to translate sums of money paid in past periods to their purchasing power equivalents at the date the financial statements are prepared.

IN FINANCIAL ANALYSIS ADJUSTING FOR INFLATION IS

A- significant factor